PDF《Paper F5》

Fundamentals Level C Skills Module Time allowed Reading and planning:

15 minutes Writing:

3 hours This question paper is divided into two sections: Section A C ALL

20 questions are compulsory and MUST be attempted Section B C ALL FIVE questions are compulsory and MUST be attempted Formulae Sheet is on page 7.

Do NOT open this question paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. Do NOT record any of your answers on the question paper. This question paper must not be removed from the examination hall. Paper F5 Performance Management March/June

2016 C Sample Questions The Association of Chartered Certified Accountants Section B C ALL FIVE questions are compulsory and MUST be attempted Please write your answers to all parts of these questions on the lined pages within the Candidate Answer Booklet.

1 Jewel Co is setting up an online business importing and selling jewellery headphones. The cost of each set of headphones varies depending on the number purchased, although they can only be purchased in batches of 1,000 units. It also has to pay import taxes which vary according to the quantity purchased. Jewel Co has already carried out some market research and identified that sales quantities are expected to vary depending on the price charged. Consequently, the following data has been established for the first month: Number of batches Average cost per unit Total fixed costs Expected selling price imported and sold including import taxes per month per unit $ $ $

1 10・00 10,000

20 2 8・80 10,000

18 3 7・80 12,000

16 4 6・40 12,000

13 5 6・40 14,000

12 Required: (a) Calculate how many batches Jewel Co should import and sell. (6 marks) (b) Explain why Jewel Co could not use the algebraic method to establish the optimum price for its product. (4 marks) (10 marks)

2 2 Swim Co offers training courses to athletes and has prepared the following breakeven chart: Required: (a) State the breakeven sales revenue for Swim Co and estimate, to the nearest $10,000, the company'

s profit if

500 athletes attend a training course. (2 marks) (b) Using the chart above, explain the cost and revenue structure of the company. (8 marks) (10 marks)

3 [P.T.O. Number of athletes $ 150,000 140,000 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000

0 0

100 200

300 400

500 600 Line C Line B Line A

3 Shoe Co, a shoe manufacturer, has developed a new product called the '

Smart Shoe'

for children, which has a built-in tracking device. The shoes are expected to have a life cycle of two years, at which point Shoe Co hopes to introduce a new type of Smart Shoe with even more advanced technology. Shoe Co plans to use life cycle costing to work out the total production cost of the Smart Shoe and the total estimated profit for the two-year period. Shoe Co has spent $5・6m developing the Smart Shoe. The time spent on this development meant that the company missed out on the opportunity of earning an estimated $800,000 contribution from the sale of another product. The company has applied for and been granted a ten-year patent for the technology, although it must be renewed each year at a cost of $200,000. The costs of the patent application were $500,000, which included $20,000 for the salary costs of Shoe Co'

s lawyer, who is a permanent employee of the company and was responsible for preparing the application. The following information is also available for the next two years: Year